Mortgage interest deduction on the table

[hoosierdoc]

Mortgage Interest Deduction, Once a Sacred Cow, Is Under Scrutiny - NYTimes.com

NYTimes says this deduction helps "bolster the income" of Americans. Sorry, a deduction does not increase my income. My income is what I earned BEFORE the confiscation begins. It may seem subtle, but this is a huge mindset difference here.

Edit: still ticked off. My value to my employer does not change if I have a mortgage or not.

 

[hornadylnl]

I'd just love to have the money it costs our government just to manage deductions.

BTW, I don't get that deduction.

 

[hoosierdoc]

I'd just love to have the money it costs our government just to manage deductions.

BTW, I don't get that deduction.

I hope to not get it in 5 years myself. My point is the concept of what our income is.

Deductions are like product rebates. Make it complicated enough an many eon't bother doing it

 

[hornadylnl]

I hope to not get it in 5 years myself. My point is the concept of what our income is.

Deductions are like product rebates. Make it complicated enough an many eon't bother doing it

Yes, but I see it as the government spending 90 cents to bring in a dollar. That, and job protection for IRS, CPA's and tax laywers.

 

[ATOMonkey]

I agree with all of this.

Compliance costs are extremely high, concerning our income tax system. Not just the cost of the IRS, but the cost that business, and wage earners, pay to be compliant with the IRS.

Also, it is telling, that credits, deductions, and lower rates are seen as "COSTS" to our Federal Overlords.

It lets you know exactly what the government thinks about your income and who it really belongs to.

 

[1$Chuck]

Yep, and this is why the flat tax idea (regardless of if it was a good idea or not) was doomed from the start. There's no way that a bunch of bureaucrats would sign up for something that would eliminate a bunch of government positions.

 

[hornadylnl]

If a mortgage deduction is seen as simply keeping more of my own money, then what do you call it when I don't have a mortgage? A penalty? A tax? Same thing with the child tax credit. So I'm being penalized and taxed higher because I don't have a mortgage and only 1 child?

All these deductions are aimed at winning votes and influence.

 

[ATOMonkey]

If a mortgage deduction is seen as simply keeping more of my own money, then what do you call it when I don't have a mortgage? A penalty? A tax? Same thing with the child tax credit. So I'm being penalized and taxed higher because I don't have a mortgage and only 1 child?

All these deductions are aimed at winning votes and influence.

Deductions are not increases in income. A lack of deduction is not an increase in tax.

Marginal rates are always going to be different for everyone unless you use a head tax, or privilege to live tax.

Even if you try to go aaaaaaaaaaaaaaaaay back to only tariffs and duties, you still pick economic winners and losers.

There will ALWAYS be a way to show that you're paying more than your fair share.

Now, I do agree with you that it is unfair to assess different rates upon people based on how they decide to live.

If you treat a family like a business, and only tax the profit of the family, then I can probably show that I pay a higher rate than you even with all of my deductions and credits. Does that mean it's some how unfair to me? No, it's just how the math works out.

Again, though, I do agree that having a single rate, be it on income, or better yet, on expenses, would go a long way to leveling the economic playing field. The added stability of being able to accurate predict your tax burden would go a long way to promoting economic growth as well.

 

[hornadylnl]

Deductions are not increases in income. A lack of deduction is not an increase in tax.

Marginal rates are always going to be different for everyone unless you use a head tax, or privilege to live tax.

Even if you try to go aaaaaaaaaaaaaaaaay back to only tariffs and duties, you still pick economic winners and losers.

There will ALWAYS be a way to show that you're paying more than your fair share.

Now, I do agree with you that it is unfair to assess different rates upon people based on how they decide to live.

If you treat a family like a business, and only tax the profit of the family, then I can probably show that I pay a higher rate than you even with all of my deductions and credits. Does that mean it's some how unfair to me? No, it's just how the math works out.

Again, though, I do agree that having a single rate, be it on income, or better yet, on expenses, would go a long way to leveling the economic playing field. The added stability of being able to accurate predict your tax burden would go a long way to promoting economic growth as well.

2 employees, all pay and benefits being equal. One pays more tax than the other because he has fewer children or less mortgage interest. Lets penalize those who choose to minimize their expenses.

 

[rockhopper46038]

If you can tax people at a higher rate just because they are more economically successful than others, I see no reason why you can't provide deductions to people that buy houses. All "fairness" in the tax code was thrown out long ago when it was decided that some people shouldn't have to pay any taxes, while other people should have to pony up almost 40% of their income to the government. The home interest deduction is being targeted simply because it is a large amount of money that the government wants to spend. That's it.

 

[ATOMonkey]

2 employees, all pay and benefits being equal. One pays more tax than the other because he has fewer children or less mortgage interest. Lets penalize those who choose to minimize their expenses.

I understand your point that the tax system is unfair, and I agree.

Calling it a penalty is disingenuous, as it implies an additional cost.

You get no additional cost by choosing to not mortgage your home. Your tax rate remains static. Your relative rate may increase if you use your neighbor as the normalizing value, but that isn't an honest accounting.

Someone with a mortgage may reduce his tax cost though.

A lack of reduction is not an increase. All that does is foster more us vs them and takes focus off the real issue, which is that BOTH parties are victims and one is simply victimized less.

It does not matter how much tax your neighbor pays. Just like it does not matter how much money he makes.

Focus on the system.

 

[hornadylnl]

I understand your point that the tax system is unfair, and I agree.

Calling it a penalty is disingenuous, as it implies an additional cost.

You get no additional cost by choosing to not mortgage your home. Your tax rate remains static. Your relative rate may increase if you use your neighbor as the normalizing value, but that isn't an honest accounting.

Someone with a mortgage may reduce his tax cost though.

A lack of reduction is not an increase. All that does is foster more us vs them and takes focus off the real issue, which is that BOTH parties are victims and one is simply victimized less.

It does not matter how much tax your neighbor pays. Just like it does not matter how much money he makes.

Focus on the system.

So losing your mortgage interest deduction is not a tax increase. Congress letting tax cuts sunset are not tax increases.

I agree that we need to focus on the system but those looking at losing their mortgage interest deductions are only focused on their loss of the deduction, not the system. Same goes for every deduction. They won't look at the bigger picture, only what they're losing.

 

[jamil]

I'd just love to have the money it costs our government just to manage deductions.

BTW, I don't get that deduction.

I think the industry created for managing deductions is worth a lot more than the government spends managing it. I'd rather have a piece of that. But I hate accounting so I'm stuck with my current gig.

 

[hornadylnl]

I think the industry created for managing deductions is worth a lot more than the government spends managing it. I'd rather have a piece of that. But I hate accounting so I'm stuck with my current gig.

And not a bit of wealth is created by either one.

 

[jamil]

And not a bit of wealth is created by either one.

I dunno. My accountant is doing pretty well for himself.

 

[hooky]

The cost of regulation and compliance doesn't create wealth any more than breaking your neighbors windows creates wealth.

 

[hornadylnl]

I dunno. My accountant is doing pretty well for himself.

A business spends 90 cents to make a widget and I buy it for a dollar. For my dollar, I have something tangible in my hand. What tangible good do I get for each dollar I pay my tax attorney? What tangible good do I get for every dollar in tax I pay that goes to IRS salaries?

 

[hoosierdoc]

National Sales Tax: no deductions or credits

I figured it was time to take this discussion there

 

[hornadylnl]

National Sales Tax: no deductions or credits

I figured it was time to take this discussion there

It'll never work. Nobody will give up their slice of the deduction pie. And you can't buy votes by eliminating deductions.

 

[Classic]

Not sure if the home mortgage deduction is right or wrong but it was intended to make home ownership more affordable and to stimulate the housing industry. It is easy to see what discontinuing it might do. Likely will increase the rate of default for those already streched thin financially and slightly decrease the rate of new housing starts/used home purchases.